Gold hovers near one-week high as US yields slow down

Gold prices rose in European trade on Thursday, resuming gains and almost touching a one-week high as US 10-year treasury yields slow down.

US consumer and producer prices data were below expectations, hurting the odds of another US interest rate hike next month. 

Such data bolstered the case the Fed has already ended the current cycle of policy tightening, with focus now shifting to the likely date for the first rate cut in 2024.

Gold Prices Today

Gold prices rose 0.4% to $1,967 an ounce, after losing 0.2% on Wednesday, the first loss in three days, moving off a one-week high at $1,972 on profit-taking.

US Yields 

US 10-year treasury yields fell 1.1% on Thursday, resuming losses and approaching a two-month low at 4.428%. 

The decline comes after US inflation data were markedly below estimates and asserted the end of the current cycle of policy tightening. 

Inflation Data

Earlier US consumer prices data showed core prices slowing down to two-year lows, reducing pressures on the Fed. 

US producer prices also slowed down to 3-1/5 year low, in another sign of slowing inflation.

US Rates

Following the data, the odds for a US interest rate hike in December plunged to 1%.

Traders also now expect the Federal Reserve to enact its first interest rate cut in May 2024.

The SPDR 

Gold holdings at the SPDR Gold Trust remained flat yesterday at 870.45 tonnes, the highest since October 3.